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TMI Blog2006 (3) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... roportionate lease amount for the unexpired period of the lease and the unadjusted seigniorage fee, if any, will be refunded." Background facts 2. We may briefly refer to the circumstances leading to the insertion of Rule 38A in the Rules. A public interest litigation (W.P. No.985/2000) was filed in the Madras High Court, complaining about indiscriminate illicit quarrying of sand in riverbeds. The High Court issued certain directions to curb illicit quarrying while disposing of the said writ petition. A contempt petition (Contempt Application No.561/2001) was filed complaining of non-implementation of the said directions by the State Government. In the said contempt proceedings, the High Court issued a direction to the State Government on 26.7.2002 to constitute a High Level Committee consisting of scientists, geologists and environmentalists to conduct a thorough scientific survey of the sand quarrying activities in rivers and riverbeds in the State and submit a report regarding the damage caused on account of indiscriminate illicit quarrying and to suggest the remedial measures. The High Court also suggested that a suitable regulatory legislation may be made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim stay, until further orders or till the leases granted to the writ petitioners came to an end, whichever was earlier. Being aggrieved by the interim stay, the State Government moved the matter before a Division Bench immediately which in turn issued an interim direction on the same day (8.10.2003) directing both parties not to quarry sand from areas covered by leases or court orders, until further orders. Subsequently, the writ petitions, which were pending before the learned Single Judge, were taken up for hearing by the Division Bench along with the writ appeals against the interim order, and were disposed of by a common order dated 11.5.2004. 6. The Division Bench upheld the validity of Rule 38A in so far as it created an exclusive right in the State to quarry sand. It was, however, of the view that the leases/permissions which had already been granted and were in force as on 2.10.2003 when the Rule came into force, could not be terminated without giving a hearing to the concerned lessees/permission-holders. Consequently, it upheld the validity of Rule 38A subject to the following conditions : "1. The State is entitled to exploit the sand by quarrying it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate agencies with effect from 2.10.2003. Though leave was granted on 5.9.2005, the interim prayer of the State to stay the conditions imposed by the High Court was not granted. Instead, hearing was expedited. The State has raised the following contentions :- (i) The High Court having upheld the validity of Rule 38A, ought not to have excluded the existing leaseholders (in regard to Government lands) and permission holders (in regard to Ryotwari lands) from the operation of the said rule. Continuation of quarrying operations by the existing leaseholders/permission-holders would negate the very purpose (to save riverbeds from indiscriminate quarrying) of the amendment to the Rules by adding Rule 38A. (ii) The State has the power to regulate the grant of quarrying and mining leases relating to minor minerals by making appropriate rules, in view of the power delegated to it by the Parliament under section 15 of the Mines and Minerals (Development and Regulation) Act, 1957 (for short the 'Act'). The power to regulate includes the power to prohibit, in appropriate cases. Termination of all quarrying leases and permissions is nothing but prohibition of quarrying by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quarry sand in ryotwari lands) shall cease to be effective on and from the date when such rule comes into force, and that too without providing a reasonable opportunity of hearing to the aggrieved lease/permission holders. In other words, the question is whether Rule 38A ought to be upheld unconditionally or whether holders of existing leases (Government lands) and permissions (ryotwari lands) should be protected till the expiry or termination of their leases/permissions as per law. 10. The Respondents contend that Rule 38A does not conform to section 4A(3) of the Act. It is pointed out that sub- section (3) of Section 4A of the Act mandates that no order making a premature termination of a mining lease shall be made except after giving the holder of the lease a reasonable opportunity of being heard; and that it, therefore, follows that any Rule made by the State Government for regulating mining leases in respect of minor minerals, in exercise of the rule- making power conferred by the Act, should conform to Section 4A(3); and that Rule 38A made by the State, to the extent it provides for termination or cessation of all existing leases/permissions relating to sand, without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under any mining lease) for purposes of conservation of any mineral or for undertaking mining operations through any company/corporation owned by the Central Government or State Government. 11.3) The Tamil Nadu Minor Mineral Concession Rules, 1959 were made by the State Government in exercise of its power under Section 15 of the Act. Rule 1(3) provides that the said Rules shall apply to all the lands in the State of Tamil Nadu. Rule 2(6) defines "quarry", "quarrying leases" and "quarrying operations" and provides that they shall have the same meaning assigned to "mine", "mining lease" and "mining operations" in the Act. Rule 8 relates to leasing of Government lands for quarrying minor minerals (other than certain types of granites covered by Rules 8-A and 8-C). It contemplates the District Collector granting lease to an applicant who offers the highest bid amount for an area advertised and notified for grant of such lease, followed by execution of a lease deed by the State Government and the lessee. Sub-rule (8) of Rule 8 provides that the period of quarry lease for sand shall be three years; and Sub-rules (8) and (11) of Rule 8 make it clear that a lease granted under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (to an extent where court might well say that Legislature never intended to give authority to make such Rules). The court considering the validity of a sub-ordinate Legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power has been delegated under the Act and then decide whether the subordinate Legislation conforms to the parent Statute. Where a Rule is directly inconsistent with a mandatory provision of the Statute, then, of course, the task of the court is simple and easy. But where the contention is that the inconsistency or non- conformity of the Rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the Parent Act, the court should proceed with caution before declaring invalidity. 13. In Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India [1985 (1) SCC 641], this Court referred to several grounds on which a subordinate legislation can be challenged as follows: "A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent legislature. Subordinate legislation m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Institute vs. Regional Director, NCTE [2003 (3) SCC 321], this Court explained the scope and purpose of delegated legislation thus : "A regulation is a rule or order prescribed by a superior for the management of some business and implies a rule for general course of action. Rules and regulations are all comprised in delegated legislations. The power to make subordinate legislation is derived from the enabling Act and it is fundamental that the delegate on whom such a power is conferred has to act within the limits of authority conferred by the Act. Rules cannot be made to supplant the provisions of the enabling Act but to supplement it. What is permitted is the delegation of ancillary or subordinate legislative functions, or, what is fictionally called, a power to fill up details. The legislature may, after laying down the legislative policy confer discretion on an administrative agency as to the execution of the policy and leave it to the agency to work out the details within the framework of policy. The need for delegated legislation is that they are framed with care and minuteness when the statutory authority making the rule, after coming into force of the Act, is in a bett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d does not oblige the observance of the rules of natural justice." 16. In Union of India vs. Cynamide India Ltd. [1987 (2) SCC 720], this Court differentiated between legislative acts and non-legislative acts thus :- The distinction between the two has usually been expressed as 'one between the general and the particular'. 'A legislative act is the creation and promulgation of a general: rule of conduct without reference to particular cases; an administrative act is the making and issue of a specific direction or the application of a general rule to a particular case in accordance with the requirements of policy'. 'Legislation is the process of formulating a general rule of conduct without reference to particular cases and usually operating in future; administration is the process of performing particular acts, of issuing particular orders or of making decisions which apply general rules to particular cases.' It has also been said "Rule making is normally directed toward the formulation of requirements having a general application to all members of a broadly identifiable class" while, "an adjudication, on the other hand, applies to specific & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t section 4A providing for premature termination of a lease, was a provision conferring power to the executive to take adverse decisions involving civil consequences. This Court further held that as the act of termination was an executive act and not a legislative act, the provision must be interpreted as implying to preserve a right of hearing to the affected person before taking the decision, in the absence of exclusion of rules of natural justice. We may, for convenience, extract the following reasoning of this Court : "The language of Section 4-A clearly indicates that the section by itself does not prematurely terminate any mining lease. A decision in this regard has to be taken by the Central Government after considering the circumstances of each case separately. For exercise of power it is necessary that the essential condition mentioned therein is fulfilled, namely, that the proposed action would be in the interest of regulation of mines and mineral development. The section does not direct termination of all mining leases, merely for the reason that a government company or corporation has equipped itself for the purpose ... Considered in this light, the section must be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or to avoid danger to public health or communication or to ensure safety of buildings, monuments, or other structures (and also additionally on the ground of conservation of mineral resources or for maintaining safety in the mines in the case of minerals other than minor minerals) or for such other purposes, by making an order of premature termination. Granting a lease in favour of government company/corporation is no longer a purpose for which an existing lease could be terminated under section 4A. In fact, along with substitution of section 4A by Act 37 of 1986 with effect from 10.2.1987, a new section (section 17A) was introduced which provides for reservation of any area for purpose of granting of a mining lease to a government company or corporation provided such area is not already held under a mining lease. The ground on which a lease could be prematurely terminated under old section 4A and the grounds on which a lease can be terminated under new section 4A are completely different. Though the grounds for premature termination have changed in section 4A, the principle laid down in Ramkishan that premature termination of lease under section 4A, after giving a hearing to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng lease. It provides that on issue of a mining lease under the Act or the Rules made thereunder, it shall be lawful for the holder of such lease, to enter upon the leased land, at all times during its currency for carrying on mining operations. Sub-section (1) and (2) of Section 4A contemplates premature termination only when the concerned government is of the view that it is expedient to do so, in the interest of regulation of mines and mineral development, preservation of natural environment, control of floods, to prevent pollution or to avoid danger to public health or communication or to ensure safety of buildings, monuments or other structures or for such other purposes. Sub- section (3) of Section 4A prohibits any order of a premature termination of a mining lease being made, without giving a hearing to the lease holder. The Act does not contemplate 'wholesale' termination of all existing leases/permissions in relation to a minor mineral without hearing. Section 17-A while empowering Central Government to reserve areas for purposes of conservation of minerals, and empowering Central/State Government to reserve areas for mining operation by Government Companies/Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termination on such grounds without a hearing. 21. If a rule is partly valid and partly invalid, the part that is valid and severable is saved. Even the part which is found to be invalid, can be read down to avoid being declared as invalid. We have already held that premature termination of existing leases, in law, can be only after granting a hearing as required under sub-section (3) of section 4A for any of the reasons mentioned in section 4A(1) or (2). Therefore, let us examine whether we can save the offending part of Rule 38A (which terminates quarrying leases/permissions forthwith) by reading it down. Apart from the statutory provision for termination in section 4A(3), there is a contractual provision for termination in the mining leases granted by the State Government. This provision enables either party to terminate the lease by six months notice. No cause need be shown for such termination nor such termination entails payment of compensation or other penal consequences. In this case, after considering the High Level Committee Report, the State has taken a decision that all quarrying by private agencies in pursuance of the quarrying leases granted in regard governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate that all the leaseholders have violated the terms of the lease or acted in a manner detrimental to environment. Learned counsel appearing for the State, in fact, fairly admitted that several leaseholders had carried on quarrying activities without violating the terms of lease and without causing environmental degradation. If any leaseholder had acted or acts in a manner likely to result in environmental degradation etc., it is always open to the State Government to terminate the lease after giving a hearing, as provided in section 4A(3). 25. Section 4A(3) requires the grant of an opportunity of hearing only for premature termination of mining leases (and prospective licences with which we are not concerned). If anyone was carrying on quarrying of sand as on 2.10.2003 in whatsoever circumstances other than in pursuance of mining leases, there is no question of hearing them before stopping quarrying activities in pursuance of Rule 38A, as hearing is required only in regard to those holding subsisting leases. Therefore, all quarrying permits for sand stood terminated with effect from 2.10.2003. All quarrying by any person, other than those holding mining leases also cease ..... X X X X Extracts X X X X X X X X Extracts X X X X
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